Most circulating cholesterol is manufactured internally, typically about 1000 mg/24 hours, out of the carbohydrate metabolism, by the HMG-CoA reductase pathway. Cholesterol, both from dietary intake and secreted into the duodenum as bile from the liver, is typically absorbed at a rate of 50% by the small intestines. The typical diet in the United States and many other Western countries, is estimated as adding about 200-300 mg/day to intestinal intake; much smaller than that secreted into the intestine in the bile. Thus internal production is an important factor.

Cholesterol is not water-soluble, and is therefore carried in the blood in the form of lipoproteins, the type being determined by the apoprotein, a protein coating that acts as an emulsifier. The relative balance between these lipoproteins is determined by various factors, including genetics, diet, insulin resistance. Low density lipoprotein (LDL) and very low density lipoprotein (VLDL) carry cholesterol towards tissues, and elevated levels of these lipoproteins are associated with atheroma formation (fat-containing deposits in the arterial wall) and cardiovascular disease. High density lipoprotein, in contrast, carries cholesterol back to the liver and is associated with protection against cardiovascular disease.

Statins act by competitively inhibiting HMG-CoA reductase, the first committed enzyme of the HMG-CoA reductase pathway. By reducing intracellular cholesterol levels, they cause liver cells to upregulate expression of the LDL receptor, leading to increased clearance of low-density lipoprotein from the bloodstream.

Direct evidence of the action of statin-based cholesterol lowering on atherosclerosis was presented in the ASTEROID trial, which demonstrated regression of atheroma employing intravascular ultrasound.